Second Circuit Reinstates Federal TCPA Class Action

Class Action TCPA

On December 3, the U.S. Court of Appeals for the Second Circuit held that federal rules govern when determining whether a federal TCPA suit may proceed as a class action and reinstated a case dismissed based on New York state class action rules. Bank v. Independence Energy Group LLC, No. 13-1746, 2013 WL 6231563 (2nd Cir. Dec. 3, 2013). A federal district court dismissed, sua sponte, a TCPA class action complaint based on the application of New York state civil procedure, which prohibits class-action suits for statutory damages. On appeal, the Second Circuit agreed with the named plaintiff that, based on the U.S. Supreme Court’s holding last year in Mims v. Arrow Financial Services, LLC, 132 S. Ct. 140 (2012), Federal Rule of Civil Procedure 23 applies when deciding whether a federal TCPA suit can proceed as a class action. In Mims, the Court had held that TCPA Section 227(b)(3) permits private parties to bring an action in an appropriate state court, but does not require that private actions seeking redress under the TCPA be heard only by state courts. Here, the Second Circuit reasoned that Mims “suggests that in enacting the TCPA, Congress merely enabled states to decide whether and how to spend their resources on TCPA enforcement,” and that “Congress had a strong federal interest in uniform standards for TCPA claims in federal court.” Based on Mims, the Second Circuit rejected its prior interpretation of section 227(b)(3) as having “substantive content” and providing a delegation of authority to state courts to set the terms of TCPA claims. Accordingly, the court held that Federal Rule of Civil Procedure 23, not state law, governs when a federal TCPA suit may proceed as a class action.